FedEx moves packages and freight for a fee. Every time a business ships a box overnight, a factory sends a pallet of goods across the country, or an online store delivers to a front door, FedEx collects a payment. The company runs two main operations: Federal Express, which handles both air and ground package delivery across the US and internationally, and FedEx Freight, which carries large partial truckloads of goods between businesses. Neither division makes anything. They simply move things from one place to another, and they earn money each time they do it. The diagram below traces where the money goes.
Five years of financial data tell a clear story about where FedEx has been. Revenue climbed from $84.0 billion in 2021 to a peak of $93.5 billion in 2022, then fell back and has stayed flat, sitting at $87.9 billion in 2025. That peak came during the pandemic shipping boom. The retreat since then reflects a real slowdown: fewer priority packages, weaker industrial demand, and the loss of a major contract.
Cash generation has followed the same downward path. Operating cash flow was $10.1 billion in 2021. By 2025 it had dropped to $7.0 billion. That is a meaningful decline for a company that needs large amounts of cash to maintain planes, trucks, and sorting facilities around the world. Net debt has stayed at $13.6 billion for three of the last five years, meaning the company has not paid down its borrowings even as cash flow has weakened.
FedEx has been running a major cost-cutting program called DRIVE since 2023. The idea is to merge overlapping networks, reduce routes, cut back-office staff, and make the whole system run more efficiently. This is not a small effort. The company has spent $1.6 billion on restructuring costs through 2025. In 2025 alone, it spent $756 million on DRIVE and related optimization work. The company expects $1 billion in additional cost savings from DRIVE in 2026. Whether those savings arrive as promised is one of the central questions hanging over the next few years.
In December 2024, FedEx announced it would spin off FedEx Freight into its own separate publicly traded company by June 2026. FedEx Freight is the largest less-than-truckload freight carrier in the United States. Separating it is a significant structural change. It means the company that remains after the split will be almost entirely focused on package delivery, both by air and ground, under the Federal Express name.
The risks facing FedEx are specific and documented. The single largest demand shock in recent years was the loss of the US Postal Service contract, which expired on September 29, 2024. That one contract had generated enough volume that losing it caused US freight volume to drop 44 percent. Priority package volumes fell 12 percent in 2025, and FedEx Freight shipments dropped 4 percent. These are not projections. They already happened.
Beyond the USPS loss, FedEx faces several other pressures. Its pilots have not agreed to a new contract, and ongoing negotiations with the Air Line Pilots Association could result in higher labor costs or disruptions. The company is also dealing with unexpected legal costs tied to international regulatory matters and legacy FedEx Ground lawsuits, which added $88 million in net expenses in 2025 alone. On top of that, rising tariffs on US imports could reduce global trade volumes, directly cutting the number of shipments FedEx handles. The company itself said in its filings that increased tariffs may lead to reduced customer demand for its services.